3/20/2009 @ 6:00AM

Gaming The Recession

Gaming should be included among the entrepreneurial ideas that can be pursued on a shoestring budget. Yes, games can be developed for little money in a garage or out of a small apartment. The genre has a low barrier to entry but also requires high creativity–a perfect mix for these recessionary times.

So, let’s look at some entrepreneurial gaming success stories. Mytopia, which was founded in 2007 with $1 million in angel funding, is a social gaming company that creates real-time games that can be played across social networks and smart phones. Millions of Mytopians play more than a dozen classic card, board and puzzle games on popular smart phones or through social networks like Facebook and MySpace.

Mytopia brother-and-sister founders Guy and Galia Ben-Artzi started their company on the belief that platforms were converging and would eventually lead to games that could be played seamlessly across different screens. The company, which is based in Palo Alto, Calif., but has most of its engineers in Israel, has launched eight popular games on its own Web site as well as on popular social networks like Facebook and Bebo.

Mytopia began by writing games for the Palm Treo. As the smart-phone world expanded, the BlackBerry became popular and eventually the iPhone came out, giving Mytopia its biggest revenue boost. The iPhone made such a dramatic difference because it was so simple for users to purchase and install applications, a process that isn’t trivial on the other smart phones. (Read “Deal Radar 2009: Mytopia.”)

Mytopia exemplifies the opportunities created because of two massive social media cultures: social networks and smart phones, each with their own intricacies and complexities but each, also, with their own immense potential. “On social networks, for example, understanding how to utilize each platform’s viral mechanisms is almost more important than quality of content,” Guy Ben-Artzi says. “On smart phones, figuring out how to deal with platform fragmentation is the main challenge to covering so many different operating systems. We spend about half our resources on making new content and distributing it, and the other half on dealing with the half a dozen operating systems that make up our world.”

But you, as a new entrepreneur, don’t need to do that. You can pick one social network or one smart phone and build a game for just that platform. Get 100,000 players at $1.99 somehow, and you have generated for yourself a nice revenue stream with which to get to the next level. At a minimum, it takes you through the recession, and you can decide what to do in a few years’ time.

Shervin Pishevar, a gaming industry veteran, believes that the current environment is perfect for individual game developers to bring new games to market. In fact, Pishevar thinks that Apple‘s
announcement this week of a new OS that supports micropayments will be a big boost for those developing games for the iPhone.

Apple unveiled its Virtual Goods Platform for iPhone games, which Pishevar’s company, Social Gaming Network, plans to make good use of. Instead of charging $19.99 upfront, Social Gaming Network can now start a player off for free, then charge them in increments of, say, 99 cents, and build up a revenue structure that gradually draws a player into a virtual goods and points buying cycle. Social Gaming Network’s virtual pet game (ifluff on iPhone) has already generated millions of dollars on MySpace since its launch, but it needs this platform to really succeed on the iPhone. (Read “Deal Radar 2009: Social Gaming Network.”)

One point of caution: Apple already has 6,000 games on the iPhone platform, of which about 2,000 are free. As you plot your course through this somewhat crowded market, you need to do your due diligence to make sure you are not wasting your time building something that already exists, or worse, has a big following.

But by deploying creativity and skills, game developers can easily partake in the entrepreneurship that America is badly in need of!